The Developer of Sn0wbreeze, iH8snow just announced that he is working on a new version of Snowbreeze and says this new version will offer baseband preservation mode. We know this is not a new feature. This feature is firstly introduced by TinyUmbrella which only allows to preserve iPhone 4 Baseband while upgrading to iOS 4.1, but later this tool stopped working because it could not preserve the baseband while upgrading to iOS 4.2.1.
Snowbreeze 2.2 will allow you to preserve iPhone 4 / 3G / 3G while upgrading to iOS 4.2.1. Below is the first screenshot of the new version: